Guided Therapeutics, the maker of a rapid and painless testing platform based on its patented biophotonic technology, announced today that it has reached an agreement with Shandong Yaohua Medical Instrument Corporation in China for exclusive distribution, sales and manufacturing rights of the LuViva® Advanced Cervical Scan for China, Taiwan, Hong Kong and Macau.
In addition to a previous payment of $50,000 made by Shandong Yaohua, the terms of the license agreement include a licensing fee by Shandong Yaohua of $1,000,000, the purchase of a minimum of ten LuViva® Advance Cervical Scan devices in 2017 and royalties for disposables based on minimum orders once Chinese Food and Drug Administration (CFDA) approval is obtained. To further align the strategic interests of the parties, Guided Therapeutics has agreed to issue $1,000,000 in shares of its common stock to Shandong Yaohua.
Shandong Yaohua will conduct the necessary clinical trials and apply to the CFDA for approval to market LuViva in China. Once approved, Shandong Yaohua will provide for the distribution and sale of LuViva within China with its established distribution and sales network.
China is potentially the world’s largest market for cervical cancer screening with over 390 million women in the recommended ages for screening. The incidence of cervical cancer in China is currently the highest in the world and increasing. Increased screening for cervical cancer is key to mitigating the losses associated with this disease. The LuViva® Advanced Cervical Scan, is a non-invasive device used to detect cervical disease instantly and at the point of care. In a multi-center clinical trial with women at risk for cervical disease, the technology was able to detect cervical cancer up to two years earlier than conventional modalities, according to published reports.
Under the terms of the agreement, Shandong Yaohua will establish manufacturing lines for LuViva within its existing medical device manufacturing facilities, which will enable Shandong Yaohua to supply Guided Therapeutics with LuViva products. With increased volume of production, advanced manufacturing processes and competitive labor rates, the company expects that Shandong Yaohua will be able to lower the costs for the LuViva device and disposables for the global market. Worldwide, the market for cervical cancer screening and diagnostics, as currently practiced using cytology (Pap test) for primary screening, is estimated at $6 billion and is projected to grow to almost $9 billion by 2020. There are about 2.6 billion women aged 15 years and older who are at risk of developing cervical cancer worldwide.
“We are pleased to be partnering with Shandong Yaohua to bring LuViva to China and improve early detection in a market where cervical cancer, often found too late, is the second leading killer among women’s cancers,” said Gene Cartwright, CEO and President of Guided Therapeutics. “The agreement also opens up the possibility to bring efficiencies to our manufacturing processes as well as opening up additional markets in East Asia.”
The company currently anticipates interim device and disposable sales for clinical study and demonstration purposes. In Hong Kong, the company believes the time to commercial sales is quicker, with device registration, rather than approval required.
For more on Guided Therapeutics, visit the company’s website.